bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Saturday 16.12.2017 | Name days: Alvīne
LatviaLatvia

SEB: among Baltic States, Latvia is the most flexible against Russian sanctions

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUNext year’s GDP growth will speed up in all three Baltic States. Nevertheless, the rate will remain moderate, reaching its potential only by 2017. Private consumption growth will maintain growth in Baltic States, predicts SEB Bank economist Dainis Gaspuitis.

Development of export and capital costs will be limited because of economic decline and import restrictions in Russia. Geopolitical uncertainty will also play a part. Estonia has been slowly recovering after the recent export slow-down. Among Baltic States, it seems Latvia shows the most flexibility against Russia’s weak economy and sanctions. The Russian factor has proven larger for Lithuania than previously anticipated. Because of this, economic growth perspectives have reduced, explains the economist.

Latvia’s economy is expected to grow 2.4% this year and 2.7% next year. Estonia’s economic growth rates are expected to be 2.2% this year and 2.7% next year. Those of Lithuania are 2% for 2015 and 2.8% for 2016. It can be concluded that Latvia’s economic growth potential is good. Nevertheless, risk level is high and cautiousness in the world is not expected to go away in the near future. In fact, these factors are expected to affect trends in Latvia, says Gaspuitis.

In regard to global economy, Gaspuitis notes that global growth rates continue to spite expectations regarding increased growth rates. One of the most significant reasons is the ruling cautiousness of developed economies. Because of this reason, low interest rates, rising asset prices and more powerful purchasing power have yet to secure activation of capital costs and consumption.

Uncertainty regarding perspectives of rapidly growing economies has grown. The decline of the Chinese stock market along with changes to the country’s currency has raised concerns about the country’s economic stability. Brazil, Russia and Ukraine now face serious economic and political challenges. The slow-down of globalization processes has actualized demographic and structural problems in growing countries. Global trade growth rate, compared to the pre-crisis period, has become slower, explains the expert.

The main indexes remain unchanged. Economic growth of USA will soon increase its growth rates from 2.5% to nearly 3%. Up until now growth of the US industrial sector has been hindered by strong dollar. The country’s service and housing markets, on the other hand, are optimistic. Revenue of American households will be supported by a rise in employment and quicker rise in wages. Weak consumption and exports ruled Japan in the first half of the year.

Western European economic conditions have since stabilized. In spite of strong currently and strict fiscal policy, the UK currently experiences rapid economic growth. Eurozone has managed to overcome the Greek debt crisis. It is hard to note any remaining negative influence. Germany’s economy develops at a steady and healthy pace.

Weaker currency, more liberal crediting conditions under the policy of the European Central Bank and lower energy resource prices will help speed up economic growth in Eurozone – from 1.5% this year to more than 2% in 2016. GDP growth in USA will reach its highest point in 2016. Different factors suggest economic growth will continue expanding, which is something demonstrated by potential of cyclic industries. Eurozone’s unemployment level remains high; future recovery is expected to be slow, Gaspuitis predicts.

Slow-down of China’s economy will be carried out gradually and in a controlled manner. The recent export decline may mean certain competition problems. China’s exports largely depend on changes in international demand, not so much on currency exchange rate. This means the recent devaluation of the Chinese yuan is more of a step toward financial market liberalization. The recent slow-down is mainly driven by a weak housing market and decline of capital costs. Nevertheless, there have been signs of stabilization in these areas. Beijing now has monetary and fiscal tools to stabilize the situation. The process will not be smooth. Assessment of the country’s economic situation is weakened by stock market decline and re-orientation of the central bank’s currency policy. In this context, there is large uncertainty in regard to the progress of realization of reforms and possible mistakes related to deregulation of the financial market.

According to Gaspuitis, economic perspectives in Nordic States remain varied. The outlook for Sweden’s 3% GDP growth remains unchanged. Economic growth is maintained by strong conditions of international economy. Nevertheless, they have yet to significantly speed up success of industrial output. Exports of goods and industrial output had grown in the first half of 2015. In spite of the decline in trade balance surplus, Sweden’s surplus remains large, mostly because of capital revenue. Rapid rise of residents’ income influences economic contribution in multiple ways. Private consumption grows relatively well. Consumption per capita, however, grows slower. Employment rise progresses at a healthy pace, partially because of steady rise in the number of residents. Unemployment, on the other hand, declines slowly.

Denmark’s recovery is convincing. Norway’s economic recovery, however, is delayed by consequences of oil price drop. Finland has had major structural problems for some time. After a three-year drop, this year will have zero growth. The region’s general growth perspectives are considered positive.

Ref: 102.109.109.6792


Leave a reply

Citadele Index: businessmen are more optimistic about economic growth

After a four-year gap, optimism has been noticed in all of Latvia’s business sectors. For the third consecutive quarter Citadele Index value exceeds 50 points. Businessmen are also positive about the country’s economy and their own finances, according to the final Citadele Index study for 2017.

Bank of Latvia increases GDP growth outlook to 4.7% for 2017

Bank of Latvia has decided in increase gross domestic product growth outlook from 4.2% to 4.7% for 2017, as reported by the bank’s governor Ilmārs Rimšēvičs.

Latvian residents’ opinion of government’s work remains negative

Latvian residents voiced the biggest degree of dissatisfaction about the development of the situation in Latvia and the work performed by the government. Although the previous evaluation of government’s work had increased by four points, it has since declined by two points, according to data from Baltic International Bank’s Latvian Barometer.

Eel fishing to be restricted in Baltic Sea for three months

European Union Fisheries Council has decided to restrict eel fishing for three months in 2018 in all waters, including the Baltic Sea. Although the World Wide Fund for Nature and environmental organization in Europe view it as a notable first step, these efforts are unlikely to have a major impact on the most important problem – eel population continues declining rapidly, as noted by WWF.

LCCI: increase of electricity bills for thousands of companies in unacceptable

Latvian Chamber of Commerce and Industry (LCCI) categorically opposes increasing electricity bills for the majority of small and medium-sized companies due to mandatory procurement component’s differentiation. The organization believes that this would basically introduce a new additional tax, making them even less competitive.

Head of Latvian Association of Regions to spend Christmas thinking on remaining in the party

Dissatisfied with multiple decisions made by Latvian Association of Regions (LAR), Riga City Council member Mārtiņš Bondars will spend the holiday thinking about his place in this political party, as he mentioned in his interview to Rīta panorama or LTV.

Estonian fund permitted to purchase several Latvia energy production companies

Latvian Competition Council has permitted Estonian fund to purchase several energy production and agricultural companies.

Meat processing giant sees room for growth in ready-to-eat foods

Consumption in the meat market segment of ready-to-eat foods is growing quickly, evaluated Finnish meat processing group HKScan that is planning to invest eight million euros in its factory in Estonia.

To fight for national minority schools, Russian representatives promise to hold a referendum

Defenders of Russian schools in Latvia promise to organize a referendum for autonomy of national minority schools, said co-chairman of Latvian Russians Association Miroslavs Mitrofanovs in regards to the transition to education only in Latvian language.

Tax payment process from capital growth to change in Latvia

As part of the tax reform, changes will be added to the Personal Income Tax Law starting from 1 January 2018. One of the changes is associated with payment and declaration of income from capital growth. The tax rate and the term for submission of declarations on income from capital growth will change next year.

Tusk deems EU migrant quotas ineffective as some states oppose taking in migrants

Donald Tusk, the head of the Council of the European Union and chairman of this week's EU summit, has evaluated that mandatory EU-wide quotas are ineffective and that there is a split between east and west as regards asylum policy.

Riga City Council’s 2018 budget – poorly planned or well-developed?

As the vote for the 2018 budget of Riga City Council draws near, representatives of all opposition parties say they will not support it as long as politicians of the ruling coalition continue viewing the city’s most important financial document as good and aimed at development.

Euro area economy has grown quicker than expected, European Central Bank estimated

Growth has been at a faster pace in the eurozone prompting the European Central Bank to raise its economic growth forecasts.

Weekends in Latvia expected to be snowy

A layer of snow will form in Latvia’s central and western regions that will remain until the middle of next week, as reported by State Environment, Geology and Meteorology Centre.

Opinion: Latvia at risk of restricting healthcare to 300,000 people

Kustība Par! political party has sent a letter to Latvia’s President Raimonds Vējonis, asking him to return to the Saeima the recently approved law on healthcare funding legislative draft. According to the party, the law restricts healthcare for 300,000 people in Latvia.

Lithuania’s 2018 budget focuses on spending cuts, NATO commitment and social security

Lithuania's 2018 budget, approved this week by the Seimas, Lithuanian Parliament, makes history for being the first budget ever with fewer spending for the governmental sector, the commitment to NATO of earmarking 2 per cent of the gross domestic product to defence and bigger allotments for social security. The budget was adopted by 84 MPs, 29 voted against, with 15 abstentions.

EU member states have to strengthen measures against sexual abuse of children

Member states of the European Union have to take more serious measures and cooperate more intensely with Europol and information technology industry to better combat sexual abuse of children, as noted by members of the European Parliament.

Latvian parliament views initiative for changing VAT rate for food product

On Thursday, 14 December, Latvia’s Saeima made its decision on the collective application that proposes reducing VAT on everyday healthy food products and increasing VAT on unhealthy products.

Maxima: residents have become more conservative in their choice of products

In Q2 and Q3, a higher degree of conservatism was noticed in residents’ choice of products. The number of buyers who gladly purchase new products has declined, whereas the number of buyers who do not change anything in their purchasing habits has increased, according to results of a study performed by Maxima.

Civil processes to be sped up and simplified in Latvia

On Thursday, 14 December, Saeima supported amendments to the Civil Process Law in the final reading. Amendments propose several major changes to the process of review of civil processes to make court sessions quicker and more efficient.

State Auditor dissatisfied with parliament’s slow legislative process

Latvian State Auditor Elita Krūmiņa plans to inquire to the Saeima about the delay with the approval of the legislative draft on the expansion of authority of her institution, as she mentioned in an interview to Rīta panorama programme of LTV.

Aldaris commences exports to France, China and Netherlands

Aldaris concludes 2017 with three new export contracts, commencing exports of products to China, France and Netherlands. Until now Aldaris has exported products to eight markets, with the largest one being United Kingdom, taking up 78.71% from Aldaris export volume, as reported by the company.

Estonian budget passed with 0.25 billion-euro deficit

The Estonian Riigikogu with 55 votes against 41 has passed the country’s 2018 state budget bill planning to spend by 0.25 billion more than it is planned to earn.

AFSAL: loan requests in non-banking industry are declined in 69% of all cases

In the first six months of 2017 Alternative Financial Services Association of Latvia (AFSAL) issued a total amount of EUR 84.7 million in consumer loans. No increase is noted in this amount when compared with the same period of 2016. Increase did not exceed 0.2%, as reported by the association.

European Parliament supports changes for combating activities detailed in Panama Papers

Public registries with names of true owners of businesses, effective protection of whistle-blowers and stricter requirements for financial intermediaries are some of the proposals intended to assist with the fight against tax avoidance, as noted by members of the European Parliament.

Newest comments

When do you go shoping for Christmas gifts?

View Results

Loading ... Loading ...

Polls Archive



Category feed: Feed: